The Law on Promoting Green Purchasing Five Years Later -- Progress and Future Tasks

JFS Newsletter No.58 (June 2007)

Citizen efforts and technical development are both important in tackling environmental problems. Establishing new, or restructuring existing, socio-economic systems to support such efforts will also inevitably be required. Without mechanisms that stimulate people to do something good for the environment and support the diffusion of environmentally sound technologies, the passion of a few will never be enough by itself to achieve significant progress towards eco-friendly lifestyles and technologies.

In Japan, some improvement has lately been seen in setting up social and economic systems conducive to a more sustainable society, but Japan still has a long way to go compared to some other countries. One reason for this is the weak authority of the Ministry of the Environment (MOE) compared to other Japanese ministries such as the Ministry of Economy, Trade and Industry. One illustrative example is the development of photovoltaic (PV) power generation. Japan has the most advanced production capacity for PV panels in the world, but due to a lack of sufficiently supportive economic and social infrastructure, Japan has dropped to second place behind Germany in world solar power output.

However, Japan has one excellent system that could serve as a model for the rest of the world - its "green purchasing" system for promoting environment-friendly products and services. This system is supported by the Law on Promoting Green Purchasing, which took effect five years ago in 2002. Even though companies might produce a variety of recycled and eco-friendly products, these products will not flow without an "exit," or market. This law was created to help provide a market for these products.

Japan also has the Green Purchasing Network (GPN), a non-profit organization that works with the industrial, governmental, academic and private sectors. It was established in 1996 and has been forcefully promoting green purchasing through cross-sectoral cooperation and consensus building. The GPN has been raising consumer awareness of green purchasing by formulating guidelines for products and services in as many as 16 categories, and by publishing a database of environmental information on more than 10,000 products. Some local networks to help in GPN's work have also been established. It would not be an exaggeration to say that, thanks to the GPN, green purchasing initiatives have become popular and taken root in Japan.
http://www.gpn.jp/English/index.html(English)

The GPN has also started working in foreign countries such as Korea, China, Malaysia, India and Thailand, aiming to support green procurement globally. In this issue of the JFS Newsletter, we introduce progress and future tasks in this field 5 years after the Law on Promoting Green Purchasing went into force, with reference to an article from the GPN Newsletter No.53 published in October 2006, which featured an interview with Hiroshi Kamagata, Director of the Environment and Economy Division in the Environmental Policy Bureau of the Ministry of the Environment.

More Than 95% Green Procurement Achieved for Most Items

The Law on Promoting Green Purchasing is more officially known as the Law Concerning the Promotion of Procurement of Eco-Friendly Goods and Services by the State and Other Entities. The law aims to create demand for eco-friendly goods and services through government initiatives, while encouraging a shift in demand from conventional to environmentally sound products in the private-sector market as well.

Under this law, national government organs such as Japan's legislature, the National Diet, courts, ministries, independent agencies and special corporations have been promoting green procurement by designating priority items for purchase and setting evaluation criteria for each item. A total of 100 green product items were designated in fiscal 2001 when the law first went into force. Since then, new items and categories have been added, bringing the number of designated items in fiscal 2006 up to 214.

The rate of procurement of designated items meeting certain evaluation criteria has been steadily increasing, with the national government and its related entities achieving a high level of green purchasing - more than 95 percent in fiscal 2004 for most of the items. The government has worked not only to shift toward eco-friendly goods and services, but also to carefully reconfirm the necessity for the products and where appropriate reduce the volume of goods purchased.

With regard to verifying the reductions in environmental impacts resulting from the shift to more environment-friendly products, data is sufficient to evaluate these effects for some items, and the reduction in total resource input, CO2 emissions, etc from the entire governmental green procurement scheme have been estimated for these items.

In a comparison of copy paper in fiscal 2000 and 2004, shifting to a recycled pulp blend reduced consumption of 35,000 cubic meters of virgin pulp, equivalent to 25,000 ton-CO2 of carbon dioxide fixation.

The amount of plastic consumption reduced by using recycled plastic in manufacturing four stationery items, such as ballpoint pens and mechanical pencils, was estimated at 20.3 tons for fiscal 2004. Calculating CO2 emissions using an emission coefficient for plastic incineration, the estimated reduction was 54.4 ton-CO2.

Expanding the scope of products targeted for verification, and developing evaluation methods to calculate results from reducing purchases will be considered as the next steps for implementing the Law on Promoting Green Purchasing.

The law requires local governments to make efforts to purchase environment-friendly goods. Local governments, including prefecture, cities, towns and villages, are regarded as having considerable market influence, as their combined purchasing power is more than three times that of the national government and its related entities. Therefore, green purchasing by local municipalities will lead to more of a shift in demand for environment-friendly products in both regional and national markets.

With the recent trend toward government decentralization, individual municipalities are basically expected to promote green purchasing voluntarily. The MOE also encourages municipalities to further promote green procurement by conducting an annual survey on the progress of implementation.

According to the 2005 survey, 33.8 percent of municipalities said they are "systematically committed to green purchasing," a 7.5 point increase from the 26.3 percent found in 2002. As for the scale of the municipalities involved, 96.7 percent of prefectures and all of the so-called "ordinance-designated" cities (the 14 largest cities in Japan) answered in the affirmative for all levels of government, compared to 53.1 percent of other city governments, and 15.2 percent of smaller town and village municipalities. This result suggests that efforts in towns and villages are still being made by individual officials, rather than by the entire government organization.

In view of this situation, the MOE is presently preparing a manual for these smaller local governments to alert them to potential cost benefits as well as efficient and effective ways to implement green purchasing.

In terms of demand shift in the market as a whole achieved by government green purchasing initiatives, various survey results on market creation for designated procurement goods (eco-friendly goods meeting certain standards) show an increase in market share for every item.

Regarding copy paper, for example, designated procurement goods accounted for 33.5 percent of total domestic shipments in fiscal 2004; about triple their 11.6 percent share in fiscal 2000. Green purchasing reduced pulpwood consumption by an estimated 770,000 cubic meters in fiscal 2004, as compared with consumption of the same amount of copy paper made from 100 percent virgin pulp.

Many other standard designated procurement goods also considerably increased their market share: from 13 to 43.4 percent for ballpoint pens, from 22.4 to 54.2 percent for high frequency inverter lighting fixtures, and from 0.9 to 67.6 (from the second half of fiscal 2000 to the second half of fiscal 2004) for newly registered low pollution vehicles.

These results imply that these favorable changes were due not only to government green procurement, but also partly due to green procurement by companies and consumers, and efforts to develop environment-friendly products by manufacturers. However, for some items such as copy paper, the share of government procurement accounts for more than 20 percent of total domestic shipments, meaning that government initiatives have made a very significant contribution to building markets for these goods.

In future, the MOE plans to continue trying to increase the number of designated procurement goods, in order to promote green purchasing for a wider range of categories and items. It plans to review each item's criteria in view of recent product development trends, so that purchasers select products and services with less environmental impact.

In addition, more reliable data on environment-friendly products and services are needed to more effectively reduce negative environmental impacts through green procurement. To secure better data, the appropriateness of various systems for evaluating and verifying information about the products, etc., needs to be examined from a variety of angles.

All national government departments and related entities published the results of their green procurement activities, though sometimes in the form of paper documents, a disclosure method is not very accessible to the general public.

Publishing information about efforts and results of green procurement enlightens both consumers and suppliers while promoting new approaches. The MOE plans to publish information in a more accessible way, for example on its website. Local municipalities are expected to make further efforts to improve communication in order to raise awareness about green procurement and encourage citizens to get involved.

(Written by Junko Edahiro)